Monitoring the Monetary System and the Flow of Capital for Forecasting the Business, Financial and Currency Cycle - and Investing in the Emerging Economies from the Euro Global Reserve Currency - on lucabindi.com

The "healthy" job market is truly a mirage. LFPR has been crushed below 1980 rates after the Obama era and new employment is for low-paying jobs, not careers. These types of things unfold in due time. pic.twitter.com/uT4Ev9j5v5— Prof. Steve Hanke (@steve_hanke) 28 dicembre 2017

Hong
Kong and Singapore retain the top two positions with a score of 8.97
and 8.81 out of 10, respectively. The rest of this year’s top scores are
New Zealand, 8.48; Switzerland, 8.44; Ireland, 8.19; the United
Kingdom, 8.05; Mauritius, 8.04; Georgia, 8.01; Australia, 7.99; and
Estonia, 7.95.
The
United States, for decades among the top four countries in the index,
ranks 11th. The rankings of other large economies in this year’s index
are Germany (23rd), South Korea (32nd), Japan (39th), France (52nd),
Italy (54th), Mexico (76th), India (95th), Russia (100th), China
(112th), and Brazil (137th). The 10 lowest-rated countries are: Iran,
Chad, Myanmar, Syria, Libya, Argentina, Algeria, Republic of Congo,
Central African Republic, and, lastly, Venezuela.
Nations
in the top quartile of economic freedom had an average per capita GDP
of US$42,463 in 2015, compared to $6,036 for bottom quartile nations.
Moreover, the average income of the poorest 10% in the most economically
…

In 1999: Fed was hiking rates as worries about inflationary pressures were present.Economic growth was improving Interest and inflation rates were risingEarnings
were rising through the use of “new metrics,” share buybacks and an
M&A spree. (Who can forget the market greats of Enron, Worldcom
& Global Crossing)Margin-debt / leverage was at the highest level on record. Stock market was beginning to go parabolic as exuberance exploded in a “can’t lose market.”Speculative asset of choice: Dot.com stocks
In 2007: Fed was hiking rates as worries about inflationary pressures were present.Economic growth was improving Interest and inflation rates were risingDebt
and leverage provided a massive “buying” binge in real estate creating a
“wealth effect” for consumers and high-valuations were justified
because of the “Goldilocks economy.” Margin-debt / leverage was at the highest level on record.

At
present, the valuation measures that we find best correlated with
actual subsequent S&P 500 total returns are at the most offensive
levels in history, matching or eclipsing the 1929 and 2000 extremes.
Even considering the level of interest rates, economic growth, and other
factors, the S&P
500 currently stands about 2.8 times the level that we believe the index
will revisit over the completion of the current market cycle, implying
an interim market loss something on the order of -64%. Moreover, the mostreliablevaluation
measures uniformly imply the likelihood of negative total returns in
the S&P 500 over the coming 10-12 year period.
Source: Navigating the Speculative Id of Wall Street

Druckenmiller:If
you took the taylor rule a normal interest rate given our economic
circumstances would be 4% interestingly. We’re at 1%. In europe, it
would be 2%. They’re at minus 40%. In sweden, it would be 3.75%. They’re
at minus 50%. That doesn’t even count the bond buying we’re talking.
But this is all in the name of this 2% inflation target. Evans:if
they’re keeping rates in this country, you know, barely above zero, in
other countries, below zero, what are the consequences of all of this? Druckenmiller:well
the consequences are huge because we’ve distorted market signals and
we’re causing all sorts of what i would call misallocation of resources. Evans: Like bitcoin? or is that unrelated? Druckenmiller:No, it’s not unrelated at all.Bitcoin,
art, wine, equities, credit, you name it. everything is one way up and
there are huge distortions taking place, and it’s all in the name of
this 2% inflation target.And when you get a misallocation of resources, it really hinders gr…

Fitch
Ratings-New York-11 December 2017: The total amount of global
negative-yielding sovereign debt remains at elevated levels despite the
European Central Bank's (ECB) plan to reduce monthly asset purchases
amid improving economic fundamentals in the Eurozone, according to Fitch
Ratings. As of Dec. 4, 2017, there was $9.7 trillion of
negative-yielding sovereign debt outstanding, up from $9.5 trillion on
May 31, 2017 and $9.3 trillion one year ago.
Fonte: Fitch: $9.7T of Neg Yielding Debt Despite Monetary Normalization

After the downgrade- much to the humiliation of the ECB which has to explain why as part of its economic revitalization efforts, i.e.QE it is holding this pile of steaming garbage -Steinhoff bonds extended losses on Friday as the world paid increasingly more attention to the accounting scandal that’s threatening the survival of the global furniture and clothing retailer.
Source: Enron 2.0? ECB, Global Banks On The Hook For $21 Billion In Steinhoff Implosion

Steinhoff's stock slumped as much as 72% Wednesday in Frankfurt, wiping out more than €7 billion ($8.3 billion) in value, before closing 64% lower at €1.08 euros. The stock closed at €5.075 on its first day of trading in the German city in December 2015, when the company moved its primary listing from Johannesburg.
But it is what happened to the company's bonds that mattered most: Steinhoff International debt plunged, with €800 million of senior unsecured bonds due in 2025 falling as much as 41 cents on the euro, to 42 cents, before rebounding modestly. What makes the collapse remarkable is that the notes were issued just six months ago, in July, and have a Baa3 investment-grade rating from Moody’s Investors Service.

This puts Total (Debt & Equities) Securities up $1.400 TN during the quarter to a record $86.080 TN. Total Securities inflated $7.003 TN, or 9.1%, over the past year. Total Securities experienced cycle tops of $55.261 TN during Q3 2007 and $36.017 TN to end March 2000. Total Securities ended Q3 2017 at a record 441% of GDP. This outshines the previous cycle peaks of 379% for Q3 2007 and 359% at Q1 2000. One more way to look at post-crisis securities market inflation: Total Securities ended Q3 $30.819 TN, or 56%, higher than the previous cycle peak in Q3 2007.
Source: The Biggest Bubble Ever, In Three Charts - Zerohedge

Total Equities Securities jumped $1.229 TN during the quarter to a record $43.969 TN, with a one-year gain of $5.923 TN (16.4%). Equities jumped to a record 224% of GDP, compared to 181% at the end of Q3 2007 and 202% to end 1999. Debt Securities gained $171 billion during Q3 to a record $42.385 TN, with a one-year gain of $1.080 TN. At 217% of GDP, Debt Securities remain just below the record 223% recorded in 2013.
Source: The Biggest Bubble Ever, In Three Charts - Zerohedge

Only a floating exchange rate systemendsthe fiat. So yes – that means as long as the “paper” dollar floats in value on world markets, it is not actually fiat any more than Bitcoin trading. The term “fiat money” means an arbitrary order or decree declaring the valueto be fixed. The dollar was “fiat” when it was arbitrarily established by Roosevelt at $35 to the ounce of gold. Since 1971, the dollar floats and it is no longer fiat because that is the definition of a fixed arbitrary value.
Today. as long as a currency floats, it is not an arbitrary declaration of its value by the government and is therefore not “fiat” as popularly stated by the hard money crew
Source: Why the Dollar is not Fiat - Armstrong Economics

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